Porting Python to an embedded system
Golly, that's kind of a tall order. There are so many services of a kernel that Python depends upon, and that you'd have to provide yourself. I'd think you'd be far better off looking for a lightweight OS -- maybe Minix 3? -- to put on your embedded processor.
Failing that, I'd be horribly tempted to think about hand-translating to C and building the essentials on that.
You should definitely look at eLua:
"Embedded power, driven by LuaQuickly prototype and develop embedded software applications with the power of Lua and run them on a wide range of microcontroller architectures"
There are a few projects that have attempted to port Python to the situation you mention, take a look at python-on-a-chip, PyMite or tinypy. These are aimed at lower power microcontrollers without an OS and tend to focus on slightly older versions of the Python language and reduced library support.